Class war and the two Britains

There are two Britains – the public sector and the private sector. Today the Times tries to make out that Councils are about to experience the same bleak prospect for jobs and sackings as private industry and the retail sector, but so far there is no evidence that the public sector faces the same dreadful pressures, or is under any kind of imperative to work more efficiently and effectively.

I do not wish to see sackings in the public sector to match the ghastly situation in the private sector, but I do want to see natural wastage and other means used to manage the public sector to greater efficiency. Parliament continues to set a poor example under this government. We are only just back from three and a half weeks holiday over Christmas and the New Year. On Monday business collapsed just after 8 o clock from a 2.30pm start, and last night Parliament only managed to keep going until just after 6 pm from a 2.30pm start. Officially we were meant to work until 10pm.

We were not allowed to debate the big issues of the day. I wanted to make a speech about how to start to sort out the banking crisis. I wanted to cross examine the Chancellor about the state of the economy. Instead we were told we had to discuss placing a new local business rate or tax on the private sector to pay for more Council spending on Monday, and yesterday the whole day’s debate was given over to a scheme to encourage people on benefit to save by offering them more public money which all parties in the House supported. With such a crashing lack of leadership and with such insensitivity to the plight of the nation, it is no wonder people think poorly of the present Parliament.

I had to listen to the radio and read the papers to hear of the new class war the government wishes to fight. We were not treated to a statement or debate on that important subject. Presumably Labour decided it would not play well if it had to withstand criticism and questions from MPs with a range of differing views on the problem. The government apparently thinks the professions and the military are refusing to appoint people to jobs from modest backgrounds out of some misplaced middle class solidarity. If they turn this into a full blown war against those who have worked hard and who are well educated it will coarsen life in the UK, not strengthen the fabric of our society. As someone who wants to see wealth and opportunity spread more widely I am quite sure attacking what works is not the answer. If the government is too unpleasant to those who do a good job it will just strengthen the exodus of talent from these islands.

I felt so strongly about all this that I sent a letter to Alan Milburn this week urging him to remedy the obvious barriers to success for brighter children from poorer backgrounds that we can see in our state schools and our family policies. As Czar of social mobility he has an important job, but not one which reports to the Commons, allows him to make Ministerial statements or more importantly allows us to cross examine him on what he is saying and doing. His appointment is all part of the post Parliamentary spin world which this government finds is its natural comfort zone, where ideas can be lodged for the news cycle and denied a day later. They live in a virtual world where soundbites and press releases create the good life effortlessly, often without bothering to implement the underlying policy properly.

The sorry progress of the private sector can be seen in announcement after announcement of closures and job losses. Demand has fallen disastrously for many companies. The public sector lives in a different world, where each year budgets go up automatically and Council Tax and Income Tax payers are told they just have to pay up. People who only work in the public sector find it difficult to grasp what it is like to work for an organisation where the annual income can fall, let alone for one where the income may reduce by a quarter or more when a savage downturn like the present one hits. If the best Parliament can do in such circumstances is to discuss putting an extra tax on business and then go home early, no wonder there is a feeling of injustice between the two Britains.

(Recent job losses include Woolworths 27,000
ITV 1000
GKN 1400
Rolls Royce 1500
Wolseley 7300
Marks and Spencer 1200
Nissan 1200
MFI 1200)


  1. Johnny Norfolk
    January 14, 2009

    Labour do not understand that all government is paid for by the wealth making private sector.
    Under labour they think they have a life of their own, but they don’t .

    If Labour do not accept the basics of economics and act accordingly. There will be no end to this.
    They are just sweeping it under the carpet and they hope it will go away.

  2. Tony Makara
    January 14, 2009

    Its going to be interesting to see how the government copes with huge public sector pay demands once inflation returns with a vengeance. Those who believe the threat of inflation has completely vanished due to the recession have not factored in the delayed effect of Sterling’s depreciation on the cost of imports, a point Mr Redwood made very well yesterday. Combined with the irresponsible pressure coming from the government to get the MPC to keep lowering rates and to eventually start printing money. When inflation returns it will be beyond the control of both the MPC and government.

    In such a dire situation, would government try to broker a deal with public sector unions and order wage restraint? Would the union members for their part be prepared to accept an ongoing cut in living standards? These are the problems that an excessively large public sector can create in an inflationary environment. We all know that if the public sector decides to withdraw its labour, the whole country is going to grind to a standstill. Mr Brown, Inflation, it hasn’t gone away you know.

    1. Robert
      January 14, 2009

      Tony, you are behind the curve, they have already started to print money in a big way. The economists who don’t believe in the consequent inflationary spiral argue that the excess money will be ‘captured’ in an increased savings, as the savings ratio heads back up to 12%. This is ‘cloud cuckoo’ thinking of course, but time will tell.

      1. Tony Makara
        January 15, 2009

        Robert, the frightening thing is that these people don’t understand that the cause of the recession is debt, not a lack of confidence or a will to spend. Too many people have had access to too much credit and the debt has to be ironed out one way or another before we can reach any sort of starting point.

        Looking toward the post-recessionary economy we have to ensure that we go into it with a stable currency and a low level of inflation. If the current strategy isn’t changed then there will be inflation. The deadliest of all economic foes. My greatest worry is the effect that a diminished currency will have on the cost of imports, particularly food and fuel.

        The way I see it, the government, through the MPC, is hoping for some pre-election spurt of recovery, but it just isn’t going to happen, their panic-policies are going to leave us going into what should be a post-recessionary economy needing to crank up interest-rates and this is going to extend the recession and make it much deeper. How many of us thought a British government would be foolish enough to pursue a policy of printing money?

  3. Patrick
    January 14, 2009

    The Labour party is the political wing of the public sector client state is it not? You can’t realistically expect them to cut anything there. Who’d be left to vote for them?

  4. rugfish
    January 14, 2009

    The democratic process in this country is an utter farce with Labour at the helm. No time for questions, questions returned with rhetorical answers and spin and “I have a committee working on that”, it’s a complete joke Mr Redwood. If you were not a RH MP your good self I could write a page about the ills of it all except you already obviously know already that change in these matters is fundamentally needed if parliament is to at any time ignite more political interest in people than it does now in the few.

    I feel very sorry for your position actually along with others, who simply wish to debate matters to reach an understandable remedy to the problems which face us all. Yet I feel even sorrier for the people themselves who are badly represented by those who wish to stifle debate.

    Given there are specific NEEDS to have people working in government jobs and in our civic centre’s, I doubt anyone would want to see job losses at all. Yet as you say, they need to be seen to be efficient and beneficial. That doesn’t mean working people like donkey’s either, it just means…..well you know already what it means. Like not having 3 for one job, like not having a myriad of managers when one or two will do. Like not paying ridiculous sums of money in salaries for people to sit on their arses and never take blame or answer questions. ( That starts at the top of course with a certain MP from Scotland who leads us. ) However, this pensions thing is a major problem as it happens because the only people who’ll be paying for it are the people working in public services by the looks of it so how does that work? – Oh aye, “we’ll just borrow the money”, I forgot that.

    Anyway, something needs to be done about pensions and salaries!
    Not necessarily jobs but what jobs they do.
    Also, watch out for nepotism there as I’d like to bet money on it that John at the council has a job lined up for his mate Peter who’s just been laid off, despite 200 others will be applying. Also, flexible working too. They wanted it flexible under the EU but are they flexible enough to take on different jobs within their existing hours? – Does anyone bother to ask them?

    Free rides on the taxpayer really have to end. Albeit that it is surely immoral to free ride the taxpayer gravy train, it is also unaffordable for our country if they continue to do so. So Quango’s should now be folded up where they are no needed for starters. Mr Pickles has a good plan for this I feel.

    Take some Pro-Plus and a few Kalms Mr Redwood. They don’t work but at least you feel positive with them in this truly negative situation which is brought about by Labour and their buddies who couldn’t care less as long as they’re alright and their poll ratings are on the up I think.

    1. Acorn
      January 15, 2009

      Would it be a good time to mention separating the Executive bit of government, from the Legislative bit of government; again?

      The prime minister would be separately elected, (would not be an MP). He/she would appoint his cabinet from the available range of persons who actually know how to run something like a bank or a large corporation, (they would not be MPs either; not elected).

      The directly elected house of commons would have to approve all government spending and taxing via legislative bills that have to get a percentage vote; not a simple majority party vote. Such that the majority party vote would always be insufficient to pass a bill; they would have to do deals cross party.

      In the interest of productivity and the credit crunch, we could reduce the number of MPs by half. And; elect them every two years; no pension till you have done at least four years. Reduce the house of lords to eighty elected members, one per county / unitary district. They would perform the same role as a US senator.

      How’s that for radical. Is there anyone out there in blogland, who knows how to make this happen?

      1. rugfish
        January 15, 2009

        Nothing is easy after all is said and done because with such a system I doubt anything much would get passed as insufficient would agree. Thus leading to very slow reforms or change or even totally static government. Wing clipped you see so they couldn’t jump when it actually is needed.
        Anyway, whet you appear to be suggesting sounds like a job for a monarch rather than a republican president who would be just as at odds with half the population as any other single manifestation in the role of leader. What we need is persuasive, intelligent but common representatives who actually reflect sensible ideas with their policies. ( Someone like Lady Thatcher in her hay day or old Winston ), or another TORY who has no ‘ideological claims’ other than to see Britain as a whole do well.

        Actually, they all make me quite sick these people we have in government with their slippery tongues, shiny teeth and well pressed suits and skirts, and the sprinkling of women and just enough racial tones to appear “representative”. What they forget when they’re acting this way, ( ordering the place on a basis of gender and race ), is that they are not ordering it on what the people actually want. i.e. Those like Mr Redwood who will actually represent his constituents and stand by a principle with decency and honour in the knowledge he is there because people want him there and not because he’s been ‘picked’ by the party.

        We live in hope that some changes can be accomplished to restore sense and British values which are long gone now, when the next Conservative govt is elected. I can only trust that the next PM has design on making my country a place I can again proudly call Britain with its wealth of decency, its breadth of sensible decision making in government and law, and for the UK to be put back on a map which does not include it as a blue dot on the side of an incomprehensibly stupid Union which without us would by now have fallen to pieces and still might with a bit of luck.

        I’d swap the Brown pawn for my Queen any day of the week.

  5. Publius
    January 14, 2009

    Mr Redwood, forgive me if this question is slightly at a tangent to the topic, but can you explain to me why taxpayer-guaranteed loans to small businesses is going to make a difference.

    I mean, is there evidence that banks are not lending to strong, vibrant, secure businesses? Or are these taxpayer-guaranteed loans intended for businesses that are not strong, vibrant and secure? Or for businesses that would be secure if there were an economic boom? — which there is not.

    What will these businesses do with these guaranteed loans? Restock? Expand the business? But why, if they’re not selling anything anyway, would they want to do these things?

    Furthermore, if the loans are guaranteed by the taxpayer, what incentive is there for the banks to vet those people they advance loans to? I mean, why bother vetting at all, if the money is taxpayer-guaranteed?

    Reply: Yes, there is evidence that good companies are finding it difficult to borrow money in current circumstances.

    1. Robert
      January 14, 2009

      Source – ‘Burning our money’

      Defaults on Labour’s existing Small Firms Loan Guarantee scheme reached a cumulative 13% in just the first two years of its existence. And that was only up to March 2008, well before the economy fell off the cliff. Here’s BERR’s own chart showing soaring defaults right across the programme:

      In terms of money, losses in 2007-08 were £69m on a programme that had only lent about £440m cumulative. So that was getting on for a 20% default loss (recoveries amounted to a notional £1m). And God knows what the loss has reached by now – 40%? 50%? 70%?

  6. Lola
    January 14, 2009

    Add another world class manufacrurer to your list, JCB.

  7. rugfish
    January 14, 2009

    And another thing whilst I’m on and this is about class.
    Could someone, anyone with influence, please tell the BBC to stop making trouble over something our Prince harry said 3 years ago which has nowt to do with anyone but him and his mate who didn’t complain, and get the trash off my screens about Prince Charles being implied as being “racist” for having a mate called “Sooty”.

    For God sake when will this witch hunting and media PC idiocy end !
    No other place on the planet would make so much fuss about ‘Sooty’ being an endearing name when it was ‘Sweep’ who was the black one !

    Sooty was flaming YELLOW !

    1. Stuart Fairney
      January 14, 2009

      I have to agree with you. A sometime contributor to this site ‘Donitz’ is a friend of mine. He happens to be balding and I mock him mercilessly about it, as well as asking him to wear a cap when the sun glints off his head, (I am considering a website showing the chronological retreat in fact). However, I’m not doing this from a sense of malice, more from a general sense of fun. In a private friendship between two mature men, they set the ground rules on how to address each other, NOT THE BBC ! And I know the chrome-dome, Jean-Luc Picard lookalike would agree with me.

      1. Donitz
        January 15, 2009

        I’m not Bald.

        1. Acorn
          January 15, 2009

          Nor am I, the nickname I have had to live with for thirty years, is purely coincidental.

    2. APL
      January 18, 2009

      rugfish: “For God sake when will this witch hunting and media PC idiocy end !”

      It will end when the vanguard, that is those in the BBC, are exposed to the rigors of the market.

      Do the Tories have the backbone to face down the hysterical screaming that would surely follow an announcement of the privatization of the BBC?

  8. alan jutson
    January 14, 2009


    Many good points once again made here about the state of UK and the absolute feeling by Members of the Public that most of our MPs are living in another world.

    Unfortunately the Public can only actually take action at the time of an election.

    Yes we can write to our MP, yes we can write on Blog Sites, but the general feeling among all of my contacts is that it is almost a waste of time (present company excepted as you are my MP and you have always responded quickly).

    It would seem that those in power do not seem to listen or understand, or do not want to, but instead rely more and more on spin, arranged leaks, or self promotion.
    Years in power seem to dull the senses.
    The increase in security afforded to Ministers means they are more remote from the workings of everyday life and its pressures.
    Public meetings are often contrived with chosen Party Members only in attendance.
    Most seem to have never had to actually earn a living in the real world (never had to sell anything in a competitive market in their lives).
    Expenses just seem to materialise from nowhere for a whole range of things that the Inland revenue whould have Self Employed people banged up for.
    Pensions are very much protected.
    I could go on but see no point I am sure you get my drift.

    Will the Tories be any different ?

    I hope so, but power tends to corrupt, so keep your feet on the ground and keep up the good work.

    You must be as frustrated as the rest of us but at least you have some clout with the media.

  9. Letters From A Tory
    January 14, 2009

    A superb post, even by your standards.

    For local councils to cry foul play because some people might have to lose their jobs is disgusting. Why should the public sector be immune to an economic downturn? No doubt vital local services are more likely to be cut than the payroll in councils that are too afraid of the unions.

    Legislating fairness has never and will never work. Punishing success and entrepreneurship is the worst possible outcome for this country and will turn the middle classes against Labour (as if they aren’t moving away from them already).

    Apologies for the shameless plug but here is a letter I wrote to Harriet Harman on the sheer stupidity of legislating for fairness and equality:

  10. Ian Jones
    January 14, 2009

    The pigs from animal farm are well and truly in control, walking on two legs and enjoying the riches from the taxpayer!

    How they can keep a straight face when coming up with their ideas!!!!

  11. Cliff.
    January 14, 2009

    The main barrier to social mobility is comprehensive education.
    The one size fits all that we have had imposed on us since the late 1960s/early1970s has consistently failed our young and thus our nation.

    The government talks about deprived areas needing “super teachers” to come into the schools there, but in truth, if many of the children do not wish to get on and wish to disrupt the class, there is little a “super teacher” can do to change that.
    I suspect that many failing schools are in the super ghettos of state dependency created by this government.
    We encourage young girls with no means of supporting children to have children with a vast number of generous benefits to ensure the child does not grow up in poverty; The problem is, these benefits to help the child, are paid to the single parent.
    A couple of nights ago, I watched a programme on the state broadcaster, that showed a fourteen year old girl, with a child of her own, pretending to be a sensible adult….My question is this; Why do we reward such people instead of prosecuting both the mother and “sperm doner” whom, after all, have committed an offence, namely underage sex?
    Because we house these people in council housing, our council estates have become single parent ghettos where that lifestyle is perceived to be the norm; We need to return to a traditional Conservative view of morality, this would solve many of the social mobility problems we have. Political correctness is slowly destroying our country, we need to be honest and say what we feel and praise right and condem wrong doing. Mr Cameron too appears to be very PC at times, he too needs to stop being PC and tell a few home truths, even if that hurts a few people’s feeling at time, I suspect the moral majority in this country would respect him more for it.

    My biggest concern in any proposals by this government is that they are more likely to drag everyone down to the lowest common denominator rather than raise everyone up.

    As this Labour government continues to use George Orwell’s 1984, not as a warning as was intended by the author, but as a blueprint for their policies, I feel it could be argued that there are indeed two classes in our country namely, the political class and the resat of us, rather as was the case in the old Soviet Union.

  12. rose
    January 14, 2009

    You could include the growth in graduate opportunities in the public sector as compared with their shrinkage in the private sector. The more (nominally) educated people big governernment can get dependant on its patronage both in national and local governernment, the more votes it gets, and the poorer the nation becomes – in all senses.

  13. Waramess
    January 14, 2009

    “I do not wish to see sackings in the public sector to match the ghastly situation in the private sector,”

    I really can not see how you can believe this. Perhaps you don’t, you just say it because you know exactly what the “big fist” will have to say in response.

    But someone has to say that sackings in the public sector must far exceed those we will see in the private sector.

    Remember the public sector jobs are paid for by the wealth creating private sector (and that includes their pension plans). If the public sector jobs do not contract at least as fast as private sector jobs the cost to the economy will be devestating.

    The public sector grew far too fast in the good times and now it must be radically pruned in order that the burden the cost of government places on the private sector might be reduced.

    Of course one of the poison chalices that this government has drunk of is the chalice of the minimum wage. The unemployed civil servants might otherwise more easily and quickly find alternative employment albeit at a reduced income.

    If the government continue to “quantatively ease” on projects that fail to deliver value and on the very infrastructure of government itself then it will not just be our children whoe
    have to repay the debt but our grandchildren and their children.

    1. Bazman
      January 15, 2009

      Do you know what the minimum wage is Waramess?

      £5.73 per hour for workers aged 22 years and older
      A development rate of £4.77 per hour for workers aged 18-21 inclusive
      £3.53 per hour for all workers under the age of 18, who are no longer of compulsory school age.

      Hmmm! Ponder on the cost of rent, clothes and food, and the price of BMW’s…

      I take it you earn a little more than this?

      The real problems started when we stopped sending children up chimneys.

      1. Waramess
        January 15, 2009

        Yes Bazman I am well aware of the minimum wage which I earned five years before my retirement (they all said I was too old to find new employment).

        The minimum wage will be a real impediment to the economy reconfiguring itself. It is far better to leave the labour force to find its own wage level which will increase the opportunities for employment which will then, in turn reduce the cost of finished products and increase the possibility of increased consumption.

        Always better for governments to refrain from initiatives such as these even though they might seem like vote winners at the time.

    January 14, 2009


    What can we ‘appalled’ do about it?

    As a group we have bleated about non-jobs, government waste, the absence of a job spec for MPs and many related issues since 2004 but who is listening let alone acting?

  15. Neil Craig
    January 14, 2009

    Quite right. If the private part of the economy which produces goods shrinks & the government bit which, largely, doesn’t (most regulators actually produce negative economic value) the result is a feedback that can only increrase the damage & make the recession worse. I suspect that, depending on the accounting for the bank bail outs, more than 50% of the economy will now be parasitic government.

  16. Bryan Davies
    January 14, 2009

    John – you keep banging on about all these important issues but your front bench just do not seem up to speed. That does worry me.

  17. Graham Hamblin
    January 14, 2009

    I have absolute respect for you and a few other member’s of parliament but not the majority. You are wasted on the back benches

    Where are the likes of Enoch Powell today? a great orator, honest and he warned the country of the perils of the Common Market and the consequences of joining. History proves him right.

    The one issue I want addressed and with honesty is this country’s continued membership of the EU, a referenda on continued membership, not the constitution and joining the Euro would be a start. Honesty in the chamber in debates about the EU’s influence in our laws and our business affairs, the cost of membership and influence on business and jobs.

    A life long Tory voter, with the exception of 1975 when I was conned by Harold Wilson, I will not vote Tory again until the elephant in the room is addressed, all the rest is obiter!

  18. Sarah H
    January 14, 2009

    I agree with the point about natural wastage in the public sector. As an aside from this I would like to ask the question – why do retired serviceman, particularly officers and retired policemen, to name just a few, naturally step into admin jobs once they retire. As a lot retire at 50 this means they are holding onto jobs which may be taken up by others, for a further 10 – 15 years. Service officers already retire on huge pensions and I just wonder whether something could be done to stop these people feeling they have a God-given right to stepping into a white collar job, particularly now when so many people have either lost or are about to lose their jobs this year. JOBS FOR THE BOYS, which has gone on, it seems, for eternity, should be stopped now or at least give those in civvi street a fair chance. Who knows, it might bring about positive change rather than those that may see it as a cushy form of additional income on their pensions. By the way, I am an ex-serviceman’s daughter and also worked for the Police.

    1. Robert
      January 14, 2009

      Worng – firstly they do not retire on huge pensions and secondly they have to compete for the jobs in most cases , they tend to be more competant than many on ‘civi’ street!

      1. Sarah H
        January 15, 2009

        I was referring to “officers” who, in fact, do retire on huge pensions, particularly Col’s and above, and in the case of Police, Superintendants. Also, unless things have changed in the last few years, a lot of posts were not advertised externally, so I don’t agee with you. Whilst you cannot generalise, I think it is a good thing to bring in new blood into the workplace so I found the remark that many were more competant than those in civi street as rather smug. In any case the point I was making was that it was wrong for retirees who want to boost their income, to job lock posts for others who have no income, but may be competent people who have just been unfortunate enough to have seen their company go bust.

  19. Matt
    January 14, 2009

    It would be brave for the government and councils to close final salary schemes to new starters but give a liberal contribution to money purhase schemes – With the current economic outlook there is probably no better time to initiate this, as such schemes are becoming rare in the private sector this sector taking the full force of the storm by way of job losses.

    Grasping that nettle today would help in a modest way to offset the huge increases in public borrowings that are underway.

  20. mikestallard
    January 14, 2009

    ESSEX BOYS: My new year resolution is to be upbeat. I have had enough of moaning. It gets you nowhere.
    “If the government is too unpleasant to those who do a good job it will just strengthen the exodus of talent from these islands.”
    Three of my four children now live abroad, very comfortably too. My son (who lives here) has just had his company car recalled to save money. He has to bus to work now.
    Hope: last night in Newsnight, Kirsty Walk actually asked the Labour Expert, who looked just like a Pyramid Seller (I forget his name), whether he thought the comprehensive school system was still working because, she thought, it didn’t seem to be.
    Then she asked the Conservative (the lady with the leopard skin shoes) why Grammar Schools and selection were not on the Conservative agenda.
    OK no answers from either. But this is the doyen of the Scottish Labour Party, who went on Christmas Hols with the leader of the Scottish Assembly. She it was who asked the impossible!

  21. brian kelly
    January 14, 2009

    I noticed on the BBC’s ‘Today’ programme this morning that Mandelson was interviewed by Sarah Montague on his latest package of measures to rescue the country from the lending crisis. She is, in my view, economically illiterate. One of the many things she did not task him about was why the banks had to pay interest at 12% to the govt on their loans and yet are expected to lend to business at 4%. So, once again, a govt minister gets a completely free ride – and with no opposition spokesman invited as a counterbalance. Nick Robinson made reasonable comments on what Mandelson said immediately afterwards, but still, the BBC appears to me to be increasingly just a govt mouthpiece.

  22. no one
    January 14, 2009

    yea the defence industry keeps lots of ex military in work contrary to the forces of competition in every other business (jobs for the boys etc)

    there are defence industry workplaces in remote areas kept in business due to political pressure to keep jobs in “rural areas” or other such nonsense

    if you added all the politically controlled jobs in the defence business and the consultancies and service organisations with large government sector clients to the public sector you will be horrified to find how few workers of the country are in the real free market

  23. Chuck Unsworth
    January 14, 2009

    This Class War is merely diversionary.
    La Harman is the prime exponent of using non-existent ‘problems’ to divert attention away from her own sheer, dogged, relentless incompetence. Labour has absolutely no understanding of, or sympathy with, the armed services.
    So now we see (and entirely predictably) that more than 50% of new graduates are unable to find jobs. What is the point of all this over-education and ‘training’? Where have our craft skills gone to? Why was the system of apprenticeships abandoned in favour of ‘college’? And what real knowledge and understanding of their trades and, more importantly, life in general, are these young people given by this mediocre ‘system’ of ‘education’.
    Education used to be about so much more than just passing exams.

  24. Adam-
    January 14, 2009

    How much actual “natual wastage” is there? How many people cross from public sector to private? I cynically imagine junior non-jobbers being promoted to newly created senior non-jobs, and that the rates of real natural wastage are extremely low.

  25. Tim Skinner
    January 14, 2009

    In many respects Parliament is more like an electoral college for the EU’s European Council than it is a legislature, and much of its residual power it has lost through delegated legislation: no wonder Parliament is so little respected.

    And with so little power and responsibility it loses its driving force. Who is interested in a mere talking shop, a theatre of empty gestures?

    The British people have all but lost their system of Parliamentary government.

  26. anon
    January 14, 2009

    Something I’ve been meaning to ask you, John. Did you have anything to do with the Wages Act 1986? This Act repealed the Truck Act of 1832: did you agree with this particular provision?

    Reply: I had nothing to do with it, and it was before I became an MP.

    1. anon
      January 15, 2009


      Thanks for the reply.

      Would you bring back the Truck Act?

      Have you got any opinion about said?

      Reply: No wish or need to go there!

  27. Matthew Reynolds
    January 14, 2009

    I am sure that a team of decent accountants working with the Tax Payer Alliance , Adam Smith Institute and Center For Policy Studies could propose the reforms needed to reduce public expenditure. The aim could be to freeze public expenditure in real terms until the budget deficit was 75% less as a share of GDP. Spend, Borrow and waste has failed on every conceivable measure so value for money , a smaller state and a balanced budget should be given a go. If you want the opposite outcome then the opposite policies seem a logical option. Hitting job creation & hardworking people by higher NI while driving out rich wealth creators with mindless basic personal allowance claw backs & new top rates is just insane when you could cut borrowing even more with public spending cuts while having no tax increases.

    Selling off the nationalized banks and ending the VAT reduction could fund a one off tax refund to give people more ready cash at a time when lots of folk could do with it. Axing the tax hikes and further reductions in the PSBR by putting the client state to the sword might encourage more retail sales if people did not feel that they could lose money via higher taxes.

    January 14, 2009

    After reading today’s Times can we expect next weeks ‘Guardian’ jobs supplement to be much thinner?
    The first thing a drowning man must do is to keep his mouth closed and stop swallowing water!

    As for EU membership, we still advocate that the Conservatives run on the platform of ‘GIVE US A 1ST TERM TO NEGOTIATE CHANGED TERMS AND WE’LL GIVE YOU A REFERENDUM ON CONTINUED MEMBERSHIP AT THE START OF OUR 2ND’
    No need at this stage to say whether, then, if a YES or NO vote will be proposed.

    Looks like a winner to us!

  29. Fox in sox
    January 14, 2009

    Dear John

    I am a Lancashire born Teaching Hospital Surgeon who was educated only at Comprehensive schools, as were my brothers. One is a diplomat and one an electrical engineer with a Phd from Cambridge University. None of us have inheireted anything apart from ambition and a strong work ethic, and a stable family back ground. All of our children are doing well in Comprehensive schools. If some of Milburns social engineering such as entrance lotteries or bussing come in we may likely be forced to privately educate our children, decreasing rather than increasing the social mix in the schools, the precise opposite of what is intended and wanted.

    The reason that we get so many immigrants is that we are a land of opportunity if one works hard. That is why the immigrant Poles are already upwardly mobile. A strong work ethic is the key. That is what is deficient with so many in the underclass, it is easier to slob about, drink, sleep around and watch Big Brother.

    The Welfare state needs radical pruning, both because it is damaging those it pretends to help and also because we simply cannot afford it anymore. Hostels with schools (alcohol free) for unwed mothers rather than council estates. We have 200 000 citizens on disability benefit for alcoholism and drug addiction, they should only get the benefit while in treatment schemes. We need to prune the NHS management that has shifted from rationing by waiting to rationing by impenetrable beaurocracy etc

    We need to end the government by edict and have parliamentary debates and votes on important issues. US Congress voted on their bailout package, you did not get to vote on it. This cannot be right. The reintroduction over the last decade of “Lords” into ministries also needs to end. Only those who are willing to face the voters, and who can present their proposals should run a ministry.

    I have an Index linked pension (as you do) via NHS Superannuation into which I pay 9% of my salary, matched by my employer. GPs pay in 23% of their incomes towards their pensions. The Government has spent this money rather than put it in a Pension Fund. These pensions may be unfunded in Government Accounting terms but they have certainly been funded by me!

    For the first time in 25 years I shall be voting Conservative. and most Doctors that I work with will be doing likewise, we are sick of the way that the Labour party have ruined medical education. They cannot buy us off, pay rises are eroded by inflation each year, but losses of professionalism are permenant.

    1. a-tracy
      January 15, 2009

      “GPs pay in 23% of their incomes towards their pensions.” Do they also pay 11% employee’s NI and 13% employer’s NI (24%)?

      I agree with your frustration about the ‘Pension savings fund’, indeed aren’t we all frustrated that the state pension age was increased from 65 to 68 for our poorest workers relying on their state pension, there are discussions of further rises for the next generation to 70.

      We are all frustrated that because Brown’s pension is guaranteed by future taxpayers with no ‘Pot’ to tax he can decide to tax private sector pensions and reduce those investment pots to suit his own ends. Many private sector pension funds are invested in sectors that we’re unaware of many of them could have been shareholders in the banks that have just been virtually nationalised but that doesn’t matter to Brown because his personal pension isn’t affected by his governments meddling.

    2. mikestallard
      January 15, 2009

      I am so glad that a few people slip through the Comprehensive net. Round here, they don’t seem to very much, actually. So your achievement is truly impressive. Well done!
      I don’t think you’ll get much reform of the Welfare State. There is a folk memory of the Dickensian Workhouse where people chewed bones meant for making glue. The Lunatic Asylums were full of mad people then and those mad people included unmarried mothers. Mad people had their teeth filed down so they could not bite the Beadle. Oliver Twist is at present showing in London.
      We lack a Dickens of the Council Estates at the moment. Perhaps Eastenders is the new Oliver Twist?
      These memories go very deep, especially in the Labour Party of once industrial Northern England and so commonsense (not this government’s strong suit) is soon laid on one side when folk memory comes along.

      1. Fox in sox
        January 16, 2009

        Hardly a few slipping through the net. Cambridge had loads of Comprehensive students 25 years ago and more now. Even the infamous Robert Peston is from a Comp.

        Ultimately I care little for the origins of people, much more about where they are headed. In Lancashire there is a saying “Clogs to clogs in three generations”, that is from millworker to millowner back to millworker again, it is usually used of badly run businesses.

        If I need an operation and there are two surgeons one with a complication rate of 1% and one with 2% I will not enquire about their schooling, it is their competence that matters. Similiarly I care not that the Shadow Cabinet has many old Etonions, but I do care that some of the team are not making their presence felt, against a pub team cabinet. It should be a walkover.

  30. John,

    Your dichotomy of two Britains – one state sector and the other private – is exactly right for our times. However you make a serious error of omission. That error is to assume that there is little difference between private and government spending – spending is just spending no matter who makes it – it broadly affects the economy in the same way. Nothing could be more wrong or dangerous to policy thinking. The quality of that spending is crucial to understand.

    So what is the crucial difference in the way money is spent? What determines the quality of spending? I think that there are two dimensions to the quality of spending that have been overlooked by yourself and other commentators.

    For companies and governments spending should be made only if the result of that spending is an outcome that facilitates a net increase in wealth. In other words the total cost of that spending is less than the income it generates. Because most commentators think that national income equals national expenditure they overlook the fact that national income includes the wealth created in the economy. That wealth is the difference between what is spent in the economy on the creation of goods and services (the aggregate cost of consumption) and the aggregate utility of what is consumed in the economy (U) in the economy – or put simply

    Aggregate Wealth (Wa) = Aggregate Utility in Consumption (U) – Aggregate Cost of Consumption (C)


    (1) Wa = U – C

    National income is not the same as aggregate utility, as national income is what producers receive for their output and aggregate utility is what consumers benefit from consumption. Aggregate national income (I) therefore divides the amount of wealth that is allocated to consumers and producers respectively. Aggregate income does not reflect the total wealth that has been produced in the economy. In this way we can divide the wealth produced in the economy between producers (Wp) and consumers (Wc) as follows:

    (2) Wp = I – C
    (3) Wc = U – I

    Where: Wp = wealth gained by producers/sellers
    Wc = wealth gained by consumers

    Clearly if aggregate expenditure on costs exceeds the aggregate income, producers/sellers suffer loss and their stock of wealth diminishes. If aggregate expenditure on costs exceeds aggregate utility both consumers and producers suffer loss and there is a net reduction in the stock of wealth in the nation.

    Looked at this way the quality of spending becomes critical to wealth creation. Spending is not just spending as Gordon Brown would have us believe. Why is all this important to a Britain divided between the state and private sectors? Because there is a world of difference in the quality of spending between the state and private sectors

    Let us explore this proposition further by asking the following questions:

    Is government spending at the margin adding to the nations stock of wealth or consuming the nation’s wealth? Consider the new jobs Mr. Brown is going to spend an extra 500 million pounds on. Will the output of those jobs have a consumer utility value of greater than 500 million pounds? If not Mr. Brown’s spending policy will actually REDUCE the nation’s stock of wealth. Also consider that Mr. Brown will have borrowed future wealth to reduce current wealth. This is the ultimate double whammy. The result is the economics of the lunatic leading to abject poverty and the economic trashing of those yet to be born.

    Now consider the spending by companies. Companies live or die by whether their marginal costs are less than marginal revenues. Consequently they will avoid all spending that does not rigorously fit into the net wealth creating perspective. Giving companies a tax break is putting money in the hands of those whose lives depend on spending in ways which add to the stock of wealth.

    What about spending by individuals? Spending by individuals, if freely entered into will create wealth (not individuals spending on taxes, because the spending of taxes by others in turn, as Mr. Brown demonstrates daily, may actually reduce wealth). Individuals however need to spend within the limits of the wealth they create though their own labour. This is why reducing individual taxes is without doubt the direct route to prosperity – it potentially increases the number of wealth creating transactions in the economy.

    Not all spending is equal – spending is not just spending – it matters in fundamental ways as to who does the spending which in turn determines the quality of that spending.

    So who should be enabled to spend more? Simple logic leads us to the conclusion that companies and individuals should be enabled to spend more (if they wish to) through tax cuts funded through cuts in government spending.

    Mr. Brown is clearly on the same economic path as Robert Mugabe and every other failed tax, borrow and spend politician throughout history.

    But John, if you were the Chancellor would you limit government spending to just those activities that facilitate wealth creation? Would you push for supply side solutions to government monopolies, not as dogma, but as ways in which to create a more prosperous Britain? If you went down this road we would have small government, opportunity for all and a thriving private sector – the exact opposite of where divided Britain is today.

  31. Bazman
    January 15, 2009

    The ideal situation for many would be to live in a council house and work for the council. Preferably in a white collar job.
    Alternatively if you are of the right background as in “What an absolutely, thoroughly, bloody nice bloke!”. You could work in the civil service or some private owned company. Privately owned by the state or Daddy’s friend. Either way you are supported by a welfare system. Inheritance could be considered welfare too.
    The underclass have the same hopes and aspirations as the middle classes. Often the only real hopes are to get a better TV and have children. Their real life and ‘career’. This is why they have so many pictures of their children around the house. Would you stop them from watching SKY and smoking fags when there is little else?
    We all know the masonic signs the middle classes give to each other when they meet, so to say the lower orders are not held back is false. The same rules apply to the often laughable la de da middle classes trying to climb the social ladder.

    1. mikestallard
      January 15, 2009

      Re read what you have written:
      1. Not getting your hands dirty: the aim of the entire State Education system from the blazers and white collar and tie right through to the Uni where (we hope) 50% of people go to escape the work which immigrants are grateful to do.
      2. Decent people, who are part of the right social group, or who have family ties, get the breaks: others don’t.
      3. The underclass’s aspirations are silly: they should be taught how to live properly. “They” (note that weasel word!) should have laws passed to prevent their smoking themselves to death. “They” should be taught that the family is just one option out of many. “They” should get a free Council House for their pregnant daughter who is “not in a relationship”. “They” should be encouraged to borrow money to buy that plasma TV, because that is all they are good for.
      4. Only silly people try and climb the ladder: they should be prevented. Social mobility must end now.
      You have just described the New Labour achievement in their decade of power!

      1. Bazman
        January 16, 2009

        I would agree with the first point, but not everyone can be a rocket scientist. For many there is no ladder to climb except a career in crime. They could choose to be a surgeon or take to the stage, so I could be wrong on this.
        Decent people… who do not smoke or drink…? This non smoking, debt free, BBC nuclear family will be enforced by law and only apply to plebs and their children. An interesting idea of social engineering that no doubt goes against the grain of all sane conservative thinking.
        As ever the question is what to do? Bearing in mind as ever, that doing nothing is doing something.
        Labour have failed to make any gains in social mobility and I think history has proved the Conservative do not think this is even a desirable thing.

        1. mikestallard
          January 16, 2009

          I do want to conclude this interlude with a plea for Grammar Schools to return (but not necessarily under that name). As our host often points out, were it not for a Grammar School, he might well be living here in the Fens (HMP Whitemoor!) There are so many people who benefitted and who do benefit from them.
          Assisted places, too, were excellent and helped a lot of people, especially boys from ethnic minorities. The very first thing the egalitarian labour people did in 1997 was to kick that ladder away. Lincolnshire still has them and their results (Telegraph this morning) were universally in the upper 90s, whereas Comprehensive Cambridgeshire was well down in the 60s.

  32. rugfish
    January 15, 2009

    A local news station interviewed a lady shop owner the other night who said she hadn’t had a customer for 2 weeks and if the bank wouldn’t giver her credit then she’d have to fold her shop up.

    The idea that a bank will come along and loan money to a ‘business’ which has no custom, defies all logic and intelligence. She blames the bank instead of herself for god sake.

    That’s the type of ‘business’ which this government will be helping. Shopkeepers sat behind counters in empty shops instead of factories producing goods to sell here and abroad.

    Doing nothing ? That’s a great joke by the way. Laughable if he ( the rat bag PM ), didn’t keep saying it.

    Far better though than “paying people to do nothing” as that’s just plain foolish.

  33. kevin
    January 15, 2009

    Labour government now want a database of all your emails phone calls and internet usage as well as all your text messages you have sent and they want this to combat terrorism but people are loosing there freedoms because the state just wants to do more and it does it badly look at all the personal records the labour government lost and them cd that contained all parents claiming child benefit and now labour want more and more powers so they can loose even more of your information plus what about the ID cards it just carries on its crazy and our freedoms are being eroded enough is enough its time for change not more of the same stupid policys that have failed us in the past and who is going to process all this information in a data base on everybody in the uk how much tax payers money is going to be wasted on this and is the uk going to feel safer afterwards is giving up our freedoms a price worth paying? It just seems this labour government wants to get more and more involved in peoples lifes all the whole time and then there need more mp to process all this information at a higher cost to the british tax payer just how far will this all go and how can we stop them surely there must be a better solution then this

    1. Bazman
      January 16, 2009

      I’d Loose your number Kev-in

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